European stock markets were fairly muted on Thursday as traders waited for interest rate decisions from the Bank of England (BoE) and the European Central Bank (ECB).
In London, the FTSE 100 (^FTSE) rose 0.1% after opening, while the CAC (^FCHI) fell 0.1% in Paris, and the Frankfurt DAX (^GDAXI) was 0.3% lower.
The BoE is widely expected to hike interest rates again as it looks to combat rising inflation. Economists believe Threadneedle Street will raise rates by a further 25bp after it put rates up in December from record lows of 0.1% to 0.25%.
The move would be the first back-to-back rate hike since 2004.
“One thing that has been notable in the lead-up to today’s meeting has been the lack of pre-briefing from MPC members which has been welcome in a way, as it means market expectations have been completely data driven, and not been driven by the various biases of the MPC members,” Michael Hewson of CMC Markets said.
“In any case with CPI already well on the way to 6%, the MPC has no choice but to act today on rates, or risk losing all measure of credibility on their inflation fighting capabilities.”
Meanwhile, EBC president Christine Lagarde has insisted that the central bank is not inclined to look at raising rates this year, and that current levels of inflation are transitory in nature.
Across the pond, S&P 500 futures (ES=F) were down 0.8%, Dow futures (YM=F) shed 0.1%, and Nasdaq futures (NQ=F) were 1.9% lower as trade began in Europe.
On Wednesday, US markets finished higher for the fourth straight day, however, Facebook parent company Meta Platforms (FB) plunged 23% in after-hours trading after its latest quarterly earnings did not meet Wall Street estimates.
The social media platform revealed that profits had fallen by 8% to $10.3bn (£7.8bn) in the final quarter of last year, even as revenues rose by 20% to $33.6bn. Users were spending more time with rivals such as TikTok instead.
Once the darling of the tech sector, Facebook has fallen out of favour among investors with a series of aggressive price target cuts last night,” Victoria Scholar, head of investment and Interactive Investor, said.
“As competition for eyeballs intensifies and as Facebook users switch to products which are harder to monetize such as Reels, the company is faced with a hard graft ahead.
“Following the indiscriminate gains over the past 22 months, the environment has turned into a stock pickers market as investors determine the winners from the losers and it looks like Meta will struggle to come out on top.”
Shares were mixed in Asia on Thursday as the latest batch of company earnings reports kept investors in a buying mood.
In Japan, the Nikkei (^N225) fell 1% while Seoul’s Kospi (^KS11) jumped 1.7%, catching up on earlier gains elsewhere after markets in South Korea reopened from holidays. Singapore’s benchmark (^STI) also gained 1.9% on the day.
Markets in China remained closed for Lunar New Year holidays.
